Ohio developer builds on Pittsburgh success
Buoyed by success developing historic properties in Pittsburgh and other cities, developer John Ferchill is taking on what he terms his biggest challenge yet — a $180 million building revitalization project in Detroit.
Ferchill is deeply involved in an effort to turn the abandoned 33-story Book-Cadillac hotel in the “Motor City” into a luxury hotel and condominium project. He hopes to use some lessons learned here to aid in that effort, he said in an interview Friday.
“Pittsburgh has been just terrific for us,” said Ferchill, whose Cleveland-based company, the Ferchill Group, found success here in 2002 when he built Bridgeside Point, a five-story, 153,000-square-foot office building at the Pittsburgh Technology Center industrial park in South Oakland. In 2005, he added to his local resume with historic conversion of former H.J. Heinz Co. buildings on the North Shore into the Heinz Lofts, a 267-unit luxury apartment complex that is 95 percent leased.
And by the end of June, a development team that includes Ferchill will be reopening the Bedford Springs Resort, in Bedford County, a historic restoration project in the range of $100 million.
“We are going to use some things we learned in Pittsburgh and apply them in Detroit,” he said. “We used a couple of things with historic development that we had never used before that brought significant money for our projects.”
Tools used in Pittsburgh include historic tax credits and easements, said Arthur P. Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation. The South Side foundation worked with Ferchill to secure the historic financing help he needed for the Heinz Lofts and Bedford Springs projects.
“John is one of the most experienced and focused developers, whether it involves new construction or restoration,” Ziegler said. “He knows how to harness together a wide variety of funding sources that make projects that seem to be impossible, possible.”
That includes the Detroit project, according to Ziegler, who became familiar with the Book-Cadillac building about a year ago while conducting a study of the site on the city’s West Side.
“It is a wonderful, historic building that will be very difficult financially to restore to make usable again,” Ziegler said. Nonetheless, he expressed confidence that Ferchill is the man to take on such a task.
“I think he can operate it very well,” Ziegler said.
“I’ve got a lot on the line here,” said Ferchill in an interview with the Wall Street Journal. His company has assumed more than $80 million in loans and other debt associated with the project, he said.
Plans are to open the building in the fall of 2008 as a 455-room Westin hotel. The top eight floors will house 67 upscale condo units, most of which already have been sold. Penthouses commanded as much as $1 million.
“I’m counting on the city of Detroit reviving itself in a manner that nobody expected to happen,” he said. Ferchill said he thinks the start of a turnaround is under way, as the city’s new ballparks, casinos and housing developments are luring more tourists and investors.
Despite his involvement in the Detroit project, Ferchill’s plans for Pittsburgh projects won’t be affected, he said.
“We have completely different teams of people working in Detroit and in Pittsburgh,” he said.
In late 2005, Ferchill sold the Bridgeside Point building at the Pittsburgh Technology Center for $31.5 million, with plans to use some of the proceeds to build a second building at the industrial park.
Plans are to break ground for that $30 million, 150,000-square-foot project within the next 30 days.
“We’re targeting technology companies, some that will have laboratory space,” he said.
Recently, local economic development officials have expressed the need for such facilities for fledgling technology firms in the region.
Ron DaParma can be reached at firstname.lastname@example.org or 412-320-7907.